Global | Ch 6 Business Strategies

Which of the following best explains why a blue ocean strategy is difficult to implement?

it requires the reconciliation of fundamentally different strategic positions - differentiation and low cost

In a successful ________ strategy, the trade-offs between differentiation and low cost are reconciled.

blue ocean

A ________ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

business-level strategy

A successfully implemented blue ocean strategy allows a firm to

charge a higher price than the cost-leader in the industry.

Bargain Styles Inc. is an apparel company that caters to the highly price-conscious customers. Through its simple apparel designs, acceptable quality levels, and minimal customer service, the company has been able to sell its merchandise at the lowest prices in the industry. Which of the following generic business strategies is Bargain Styles applying?

cost-leadership

Firms pursuing a differentiation strategy primarily seek to

create higher customer perceived value than the value that competitor's create

In a focused cost-leadership strategy, a firm

delivers low-cost products and services to a specific, narrow part of the market.

Home Smart Inc. is a chain of supermarkets that sells its products at higher prices than its competitors. Yet, the supermarket chain has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Home Smart adopted in this scenario?

differentiation

A firm experiences ________ when there are increases in cost per unit as output increases.

diseconomies of scale

A company that uses a differentiation strategy can achieve a competitive advantage as long as its

economic value created is greater than that of its competitors

DiscountHaven Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and sales, logistics, administrative, and other such related costs get divided between a large number of product units stocked in its stores. This makes it difficult for smaller retail stores and supermarkets to compete against DiscountHaven's low prices. Thus, DiscountHaven has a competitive advantage due to its 43) ______

economies of scale

________ is best described as decreases in cost per unit as output increases.

economies of scale

Organic Eats is a restaurant that caters to the needs of a small percentage of highly health-conscious consumers. It has an all-organic, vegan menu. Since there are very few restaurants that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Organic Eats is following a

focused differentation strategy

When a differentiator charges a similar price as its competitors in the same strategic group but offers more perceived value, it

gains market share from other firms

Diseconomies of scale refer to

increases in cost as output increases

The primary goal of a firm pursuing a blue ocean strategy should be to

offer a differentiated product or service at a low cost

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as

stuck in the middle

Value drivers contribute to a firm's competitive advantage only if

the increase in value creation exceeds the increase in costs

A blue ocean strategy differs from a low-cost strategy in that

the intent of a blue ocean strategy is not to be the absolute lowest-cost provider because a blue ocean must also increase perceived value.

Which of the following is a firm effect that has an impact on the competitive advantage of a firm?

the value and the cost position of the firm relative to its competitors